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Specific Grounds for Disciplinary Action or Termination under Korean Labor Law

It is first noted that the basic law in Korea regulating labor standards is the Labor Standards Act (“LSA”), ”), which is applicable to the employers with at least 5 employees.  As for the employers with less than 5 employees, only a part of LSA provisions would be applicable.  And, LSA provisions relating to our comments below are not applicable to these employers with less than 5 employees.  The only statutory restriction for a employer with less than 5 employees is the prohibition of dismissal during a particular period of time such as employee’s illness and childbirth.  That said,  please bear in mind that our comments below are only provided for employers and employees at a workplace with at least 5 employees.

Article 23 of LSA requires a “justifiable cause” if and when an employer takes disciplinary actions, including termination of employment, with regard to its employees.  Korean courts have held that a “justifiable cause” refers to such causes as criminal offence, serious illegal acts, and gross negligent acts, etc. which would make maintaining of the relevant employment relationships no longer possible under generally accepted public notions.

Especially, because a termination of employment is the most extreme measure, taking away an employee’s means of making a living, Korean courts are known to be very strict in applying the above-noted criteria, when it determines whether a particular termination is justified.  Thus, Continue reading


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[Q&A] Leaking Employer’s Confidential Information and Employment Termination : What Is Confidential Information under Korean Law?

“Hello, I am a U.S. citizen working for a Korean listed company.  Recently my company sent me a dismissal notice saying I had breached the employment contract by leaking their confidential information.  Informations at issue are a set of sale/purchase statements of the company.  I downloaded those informations from the company’s server to my personal email account.  But, there has been no warning mark of confidentiality.  My other colleagues have a free access too, and the information sometimes was provided to our suppliers.  Did I really breach the confidentiality of my Korean employer?”  

Leaking employer’s confidential information could result in a termination of the employment contract.  The legal issue, however, still remain whether or not the information can be regarded as a confidential information.

Most employers in Korea have their own rules of employment which state what is a confidential information.  And even an employment contract could list a set of confidential informations which the employee should not disclose to 3rd parties.  But, defining what is a confidential information is a matter of law and, therefore, the Korean court does not always follow the definition which an employer had been set in their internal documents.

The Korean court has well-established precedent that the confidential information should be Continue reading


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Classifying a Foreign Incorporated Corporation as a Domestic Corporation for Korean Tax Purposes: “Actual Business Management Place” Rule

그림 67When a foreign incorporated company does a business in Korea, it is very fundamental to determine whether the company is a domestic or a foreign corporation for Korean tax purposes.  A major difference in tax liability is that, in principle, a foreign corporation is liable for taxes only on the incomes generated in Korea rather than a worldwide income.

In this regard, the Corporate Tax Ac of Korea(“CTA”) defines a “domestic corporation” as a corporation with its headquarter, main office, or actual business management place located in Korea, and a “foreign corporation” as an organization which has its head office or principal place of business in a foreign country.  What makes distinguishing domestic corporation for a foreign corporation under CTA difficult and challenging is the meaning and application of the term of “actual business management place” set forth in CTA.  For example, in a case decided by the Supreme Court of South Korea in 2016, a Singapore incorporated company had challenged the Korean tax authority’s decision that its actual business management place was in Korea.

The Singapore company had a wide variety of international business portfolio and among them was a trading foreign issued corporate bonds including a Korean corporate bond.  The Korean tax authority decided that the company’s actual business management had taken place in Korea after finding the facts that the company had a liaison office in Korea, one of the directors was residing in Korea and financial documents relating to the Korean business was stored and managed in Korea.  And this Continue reading


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[Q&A] Can I Enforce My Washington State Child Support Ruling in Korea?

(Question) I have a question regarding my current situation with my ex husband. He is a Korean national and working there in South Korea.  I lived there until 2014 when I came back to Washington and filed a divorce complaint here. Since then he has refused to speak with me.  This year my US lawyer duly served him with the paper but he just kept ignoring it.  At any rate, I got a divorce decree and child support ruling for my baby this April.  Now I am wondering how I can enforce my US ruling in Korea, knowing that he is living a  luxurious life and feels that he can just ignore his child and the responsibilities that come with it.

(Answer) I have to say there is something unclear in this case.  If the court proceedings in Washington(WA) court have been duly made, i.e. (i) the WA court had proper jurisdiction and (ii) he was duly served, you can apply for its execution in Korea to the Korean court. Otherwise, you may initiate whole process de nuvo in Korea.  The second threshold seems to have been met here. Thus, the real issue here rather be the first one.

Please note that the jurisdiction must be acknowledged in the view of Korean law, not WA law. Thus, even though the WA ruling says the WA court has a proper jurisdiction, the Korean court will Continue reading


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Introduction to the Korean Inheritance Law

When a person is deceased in Korea, the inheritance comes to fruition immediately.  The Korean inheritance law provides who shall become the inheritor and beneficiary of the property of a deceased person, i.e. estate.  This, however, does not always mean the inheritor shall be given all the property of the decedent.  There are separate rules and restrictions of the distribution of the estate in Korea.

The basic rule of the Korean inheritance law is that the property of a deceased person is distributed according to his or her will.  So, a person who is not categorised as a person who can be an inheritor by law can be a beneficiary of the property by the decedent’s will.  What if there is no valid will?  The Korean inheritance law sets forth the rule of intestate succession.  This rule of intestate succession names the beneficiary and the shares of each beneficiary for a distribution.  The intestate succession rule provides that persons become beneficiaries in the following order:

  1. Direct descendants (children or grandchildren)
  2. Direct ascendants (parents or grandparents)
  3. Siblings
  4. Relative within the 4th degree of collateral consanguinity

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Seoul Family Court Finally Answered the Paternity Case between a Korean Father and His Kopino Children Abandoned in Philippines – Paternity Actions in South Korea

On May 30, 2014, the Seoul Family Court handed down a ground-breaking decision which recognized the paternity between a Korean male and his children born out of lawful wedlock in the Philippines.  The decision marked the first time ever that a Korean Family Court adjudicated on the parentage of so-called “Kopino”, the term for those children born between a Filipina mother and a Korean father out of marriage.

The sociocultural issue surrounding the Kopino has been the criticism that the Korean fathers have abandoned Kopinos by leaving Philippines and providing no supports.  In this court case, the story was quite typical.  The Korean father met a Philippine woman back in 1997, when he was running a toy manufacturing business in Philippines.  In 1998 and 2000, they had 2 children.  But he couldn’t marry her, because he was already married to another woman in South Korea.  On April 14, 2004, he suddenly left Philippines alone and never contacted his children again.  He had never paid any support for his children.

In December 2012, frustrated by the irresponsibility of the Korean father, the children’s mother in Philippines had moved to bring a legal action in Seoul Family Court against the Korean father to establish the paternity of her children.  After 15-month litigation, the DNA test confirmed the blood ties between Continue reading


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What to Expect When Dismissed by Employer in Korea

It is well known that the Korean labor law provides the employees with generous protections when it comes to the matter of disciplinary measures taken by the employer. Unlike many other foreign legal regimes, Labor Standard Act of Korea (LSA) requires the employer of five or more employees to establish a just cause for a dismissal and any other disciplinary actions.  In other words, the employment is not “at-will” in Korea.  (Note:  There is a legal concept of no fault dismissal based on the managerial hardship under the LSA, which requires very strict requirements to execute.  This will be the subject of our upcoming article) 

This rule of law shall equally apply to the employment contract between Korean employer and Foreign employee in Korea, and vice versa.  More importantly, this is the case even when the employee working in Korea agrees in his employment contract that the Korean labor law does not apply.  That is because the Private International Act of Korea which provides the general principles for the choice of law in Korea enables every Korean and foreign employee working in Korea to enjoy the very protections under the mandatory rules of the Korean labor law. Therefore, it is highly advisable that any foreign employee working in Korea and a multinational which has employees in Korea must understand how the Korean labor law regulates the dismissal and under what situation the dismissal becomes a wrongful termination.

Then What is the Just Cause for Dismissal in Korea?

The LSA does not provide what the just cause exactly means.  It is up to the court’s review and the decision thereafter.  That said, it is firmly established in the Supreme Court’s precedent that Continue reading